Investment by Australian miners and exploration companies in Africa has surged to $US20 billion ($A18.8 billion) and more is in the pipeline, Foreign Minister Kevin Rudd says.
About 230 Australian resources companies currently hold more than 650 projects in 43 African countries and territories.
Around 20 companies and 100 projects had been added since the beginning of this year alone, Special Minister of State Gary Gray told the Paydirt Africa Down Under conference in Perth on Wednesday.
Of all overseas Australian mining projects, more than 40 per cent were in Africa and billions of dollars of further investment was in the pipeline, Mr Rudd said.
The former prime minister had accepted an offer to open the conference in person, but instead appeared via videolink after his recent heart surgery.
“Australian resources companies have well and truly discovered Africa,” Mr Rudd told delegates.
“Foreign direct investment to Africa increased from $9 billion in the year 2000 to $62 billion in 2008, almost as large as China relative to GDP (gross domestic product).
“And despite all of this, Africa’s commodities boom is just starting.”
Africa had arguably the world’s richest mineral deposits, estimated at 30 per cent of global mineral resources, but accounted for only five per cent of exploration expenditure, so activity was set to surge, Mr Rudd said.
“Australia is at the forefront of this exploration and investment, and there is opportunity to expand this even further.”
Aside from the allure of resources, Mr Rudd said the continent was becoming a more attractive investment destination in other respects.
“Africa is changing for the better. Democracy, accountability and governance in many countries across the continent are improving,” he said.
“Africa is young and urbanising. Technology is changing society.”
Sandile Nogxina, special adviser to South Africa’s Mines Minister Susan Shabangu, said the country had been relatively unscathed by the global financial crisis.
The government’s debt to GDP ratio was below 50 per cent currently, compared to more than 100 per cent for many G7 member nations, he said.
However, South Africa’s safety record remained appalling and needed improvement, Mr Nogxina said.
Mr Nogxina also said investors had every reason to be concerned about a call for the nationalisation of South Africa’s mines by the Youth League of the ruling African National Congress (ANC).
However, Ms Shabangu remained of the view that nationalisation was “not government policy in South Africa”.
The debate would be “put to bed” at an ANC policy conference in July next year, Mr Nogxina said.
The Africa Down Under conference is the biggest business forum about the continent outside of Africa.
It has broken records again this year, with 2,000 delegates and 11 African resources ministers in attendance.
